Bond pricing & yield worksheet with answers

Free printable Bond pricing & yield worksheet: 6 problems from easy to exam level, with an answer key. Print it or save it as a PDF.

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Name: ____________________ Date: ____________

1.Easy

A bond with a face value of €1 000 pays an annual coupon of 8% and trades at €930. Find its current yield CY in percent.

F = €1 000coupon = 8%P = €930

CY = %

2.Easy

A zero-coupon bond with a face value of €1 000 matures in 7 years and costs €745 today. Find its yield to maturity YTM in percent.

F = €1 000n = 7P = €745

YTM = %

3.Medium

A bond with a face value of €1 000 matures in 12 years and pays annual coupons. It sells for €1 242 when the yield to maturity is 3.5%. Find the coupon rate c in percent.

F = €1 000n = 12P = €1 242YTM = 3.5%

c = %

4.Medium

A bond with a face value of €1 000 pays an 8% annual coupon in two half-yearly payments and matures in 5 years. The yield to maturity is 4% per year. Find the price P of the bond.

F = €1 000coupon = 8%YTM = 4%n = 5

P = €

5.Hard

A bond with a face value of €1 000 pays an annual coupon of 4.5% and matures in 3 years. The yield to maturity is 3%. Find the Macaulay duration D in years.

F = €1 000coupon = 4.5%n = 3YTM = 3%

D = years

6.Hard

A bond with a face value of €1 000 pays a 7% annual coupon in two half-yearly payments and matures in 4 years. It sells for €1 053. Find its yield to maturity YTM as an annual rate (twice the half-yearly yield), in percent.

F = €1 000coupon = 7% (2×)n = 4P = €1 053

YTM = %

Answer key

1. CY = 8.602 %
2. YTM = 4.295 %
3. c = 6.004 %
4. P = 1180 €
5. D = 2.875 years
6. YTM = 5.506 %

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